look at options the treasury department has to avoid hitting the debt ceiling and later, the mission and scope of the bureau of alcohol, tobacco, firearms, and explosives. "washington journal" is next. ♪ host: good morning, it is monday, january 14, 2014. the house returns to capitol hill today for an abbreviated worth -- an abbreviated work week. it will include spending and though relief in the wake of hurricane sandy. work continues on the obama administration's response in the wake of the mass shooting in connecticut. that is where we want to be in with you this morning.

what fox you have on the roll of film, television, and video games in this ongoing debate? what responsibility, if any, to those groups have to change or put restrictions on their products? give us a call on the democratic line. for democrats, 202-585-3880. for republicans, 202-585-3881. for independents, 202-585-3882. and if you are outside the united states, 202-585-3883. you can catch up with us on all of your favorite social media sites. or you can e-mail us, journal@c- span.org. i want to start with a story from "the washington times of." "films and videogames get short shrift in gun violence review."

host: we want to get your take today on what you think those meaningful solution should be, specifically for the film, television, and video game industry. we're already getting comments on the facebook gave this morning. i want to read a few of those now. meaningful solution

we will take your calls this morning in the first 45 minutes, but first want to play you a segment from the state of the union. this is congresswoman marsha blackburn, talking about the role of violent video games. [video clip] >> i watched a couple of these of violent video games to you ready for this segment and i was astounded with some of the things i was seeing on call to duty. we know the norway shooter would use that as target practice. you say let's keep children safe, protect our freedom --

let's put these issues on the table and have a good, solid conversation about it. host: we are taking your calls this morning to get your thoughts on this issue. we will start with queens, new york, independent line. caller: i believe that we need to look at video games, the mental health aspect, but the real problem is that osama bin laden can buy a gun by shaving his beard, no background check. if we love our children we have to get on board. we do not know if someone has a mental health problem until they use a gun? host: how should these industries change what they're doing? caller: it is age appropriate at this point. we are missing the point, like

that blogger just wrote, other countries have these videogames, but they do not have semi- automatic weapons with all of these bullets. we will not know if they have those concerns. it is focused on the amount of bullets. host: from cnn this weekend, a column that might agree with some of the comments the caller was just making. he writes that last month washington post compared spending on video games in gun related countries.

host: we will bring in ken, from albion, michigan, on the democratic line.

caller: i wanted to make a comment about violent media during commercials. you are watching a show that does not having any violence in its, and then you go to commercials and the gaming industry might show call of duty, or a trailer for an upcoming movie that is extremely violent, even though the content you are watching has no violence in it. you are bombarded during the commercials. host: you are saying that you cannot avoid the violence even when you try? caller: correct. host: what needs to be done? ratings on commercials? caller: i think that they need to curb that as far as it is allowed to be shown during certain tv show programs. host: i want to bounce this comment from the mercurial

entertainment association in the story from "the washington times." host: you disagree? you think it needs to be more regulation? caller " no, not in terms of what is being sold -- caller: no, not in terms of what is being sold. host: how do you keep it from happening, then? caller: that is what is on the table. host: some of those might come

up this week when joe biden unveils the recommendations that his group is making. jim, good morning. caller: i have been listening to the commentary about violent video games. i guess it is cause and effect, caused being behind the violent action, the violent media. i do not simply agree with that. i think that the biggest issue is mental illness. really, the media in this instance is being used as a scapegoat. host: so, what needs to be done? put more money into the mental health system? caller: i would recommend that, but in a targeted way. as you probably know, the fbi

has a national fingerprinting database that could exist for people with mental illnesses. the real issue is the accountability for those the purchase weapons. not only the accountability of the owner, but those who may steal them. bob host: this commentary comes from examiner -- steal them. host: this commentary comes from examiner.com. host: so, we are getting your

thoughts this morning. what are the other articles this morning in the arts section of "the new york times"? this is the front page. the picture next to this show of the golden globe winners from last night. the issue of extreme violence on screens has become a thicket that programmers cannot avoid. "i do not think that there is anyone on this planet whose life has not been changed or affected by the recent course of events. nothing that is on the air is inappropriate. the network justifies the level of carnage by making sure the bad guys are brought to justice.

there's a shot -- "criminal lines" is an adult show -- criminal minds" is an adult show. steve, good morning. caller: in my judgment, the issue of violence and cause and effect relative to children or adult behavior has called for the recommendation from joe biden where he recommends that there be more research on this issue. i highly endorsed a good deal of independent base research relative to how children get entertainment. videos, teenagers, adults.

the shame behind our use of such incredible tools is that relative to teaching children, teenagers as well as adults, we need to give them problem- solving skills relative to real- life and how to develop and expand their personality. host: steve, thank you for the call this morning from new jersey. this twitter comment -- violent video games? what happened to baseball? another -- media glamorizes the violence. these games are played all over the world. they are just games. phone lines are open. walter, independent line. good morning.

your thoughts on violence, the movies, and video games? caller: i am 51 and i have played video games since they came out. a long time ago they used to complain about a game called dungeons and dragons, a role- playing game that they said lead to violence and kids killing people, things like that. it is not. you hear about football players going crazy, things like that. it is just like that. there is something that is wrong with a person that extends through family or whatever. we have got to start looking at getting the family back together again and putting more discipline on the children. the games that my children play, i do not have a problem with them. call of duty, other games like that. i do not believe it is based on the video games. i believe is on the family.

host: thank you for the call this morning. john locke, an authority who has written extensively on the connection between guns and crimes, says that there are too many variables involved to tie mass shootings to video games. bu host: i want to bring you a little bit about joe biden talking about gun violence with the video game industry. [video clip] >> obviously, involved with

social education, and you and the video game industry. i come to this meeting with no judgment. you all know the judgments that others have made. i think that we had a very productive meeting yesterday with the broadcast industry. they had some very constructive ideas as to how the could help. host: that was vice president joe biden talking. you can check out his entire appearance on our website, c- span.org. a programming note on this subject today. at 9:00, the johns hopkins university is holding a summit on reducing gun violence in america, including martin o'malley, the governor of maryland, and michael bloomberg, mayor of new york city, co-chair

of the mayor's against illegal guns coalition. that is at 9:00 a.m. on c-span 2. now we are going to the democratic line, murray, from brooklyn, n.y. caller: good morning. the last two comments that you read and the vice-president _ my point. we need to look at individual -- underscore my point. we need to look at individual responsibility and gun violence. people who feel they have the right to own guns or published media to -- which shows violence have a firm foundation, but the but -- but the foundation that they cannot stand on is that we must consume this type of

material. individual responsibility means do not buy it. if we do not buy it, do not patronize it, it goes out of business. it does not come to a matter of the right to have certain types of media. if we as a consumer do not buy, do not consume, do not patronize this type of media, these type of outlets will of course either have to take their business in another direction or go out of business. host: you are saying that this needs to be a grassroots sort of thing? a boycott of violent media? caller: yes, definitely. not even so much formalized, but people need to take personal responsibility. i have a child. i cannot have pornography in my house, whether i like it or not.

there is a lot of nonsense about how to protect children, but protecting children means in your personal life, when you turn on the tv, turn it off. if there is nothing but violence on television, do not want to cut -- to not watch television. host: right now we want to bring in a staff writer with "roll call." he has a preview of what is coming up this week on capitol hill. caller: good to be with you. host: what is on tap this week for congress? just the house is in this week, correct? caller: yes, and it is an abbreviated work week. house republicans will be having their annual news report -- will be having their annual retreat. the house will be trying to find

a way forward. if the whole package had gone through, $51 billion in relief for victims of serb -- super storm sandy, with reconstruction efforts in the northeast. as you might remember, right before the last congress ended, there was a bit of a dispute among house leadership that has been reported over whether or not to bring this senate passed a bill in the last congress to the floor. obviously, the decision was made to not do that, drawing the ire of governor chris christie in new jersey, andrew cuomo in new york, and others, as well as lawmakers in both parties from the affected states.

what they are trying to do now is figure out how to move forward on that. how those lawmakers, as far as they are concerned, make amends for what they view as a mistake. host: the senate is not coming in until next week, but there is a lot talk about nominations on going. this is the headline from "the washington post." "colin powell defends chuck to bes qualifications the next defense secretary." what did we find out on the sunday shows? caller: that things done not all clear. we have a story that we've posted yesterday, bob corker is

now the ranking member. this will steer the confirmation battles from senator kerrey. shut hegel served on the foreign relations committee when he was a senator. if -- chalk heghuck hegel sir re foreign relations committee when he was a senator. they said they had formal studies to do on his record. there seems to be a lot of people from both parties, but primarily republicans, who are expressing skepticism. what remains to be seen is

whether or not they will allow the nomination to go through, even if they oppose it. this would require the democrats to come up with 60 votes. host: the piece from "the new york times" this morning is that hegel will meet with chuck schumer. the headline says that it could be a crucial moment to advance the nomination. he is expected to press him on issues. schumer will be the first to meet with hegel since the nomination last week. who else is the heat set to meet with this week? -- who else is he set to meet with this week? caller: he has already started to make the rounds on the

telephones. there has been some reporting out there on where he is going. he will have to meet in the days and weeks ahead in person and not over the telephone with everyone on the armed services committee, that is the committee that will be overseeing the nomination. he will have to cast a wide net. chuck schumer and some of the other jewish democrats will be high on the list of people that needs to speak with. but the first challenge for renomination is always to get the nomination out of committee. you should expect to see, if there are any wavering democrats on the committee expressing skepticism, those will be important. the other one to meet with would

be the other senator from new york, senator gillibrand, who is in fact on the armed services committee, i believe. those are some of the first steps in the practice, to make sure that he has as many good graces with members of the committee as there possibly could be. host: niels lesniewski, thank you so much for giving us a preview of the upcoming week on capitol hill. caller: thank you. host: we are continuing this subject of gun violence in the media, movies and television, getting your thoughts for the next 25 minutes or so here on "washington journal." corpus christi, arthur, texas. your thoughts on the responsibility of those industries to respond to the mass shooting in new town?

caller: i do not think a lot can be done. as far as industry is concerned. people pretty well get what they want. exposure,children's you know, that has to start in the home. my mother was an elementary school counselor for 33 years. people talk about how kids have problems learning and all of that stuff. the parents want them used as an example. parents basically want the schools to raise the kids and it does not work. kids need a good, you know, stable home to grow up in so that they can learn and be taught different values, good values. as far as this gun business, you

know, guns are not going to go away. we have always had guns. if another shooting happened tomorrow, this is off topic, but concerning these past shootings, the most disturbing thing that i can find about them is that they are done by young people. some older mentally ill man, like charles whitman, but these are kids who are doing these shootings. they are totally removed from reality. host: that was corpus christi, texas, this morning. a few more comments from twitter -- comments from facebook --

host: we are taking your comments on all of our social media site this morning. vice-president biden met on friday with top video game publishers. the publishers included electronic arts, activation, and lizard. this was to discuss ways to curb gun violence in the united states. this story notes --

host: one other note about that meeting, this from a story in "the washington post." "the decision to even in it -- to even attend the meeting sent shock waves through the gaming industry. "talking with joe biden was tantamount to accepting responsibility." host: we are taking your thoughts this morning. jesse, clearwater, florida. caller: hello, lenin is jesse. i have been --

host: go-ahead. -- hello, my name is jesse. i have been -- host: go ahead. caller: in the 1960's, 1980's, g.i. joe, violence has been around. it is more of the guns. the guns that were not able to be possessed of back then are able to be possessed now. some of it is younger people. i think that mental issues of the things that need to be worked on, not so much violent video games. i cannot imagine that these kids suddenly think that violence is right. it is the about -- the availability of guns and lack of mental care.

if that could be solved, the problem would be a lot less. host: more from "the new york times" and that arts section story. this is a quote from the head of fx, and he stressed a distinction between what he called third person entertainment and first-person entertainment. the former is a tacit viewing --

host: host: continuing on that subject, jerry, south dakota. caller: i have a 22-year-old son who is a product of the last generation of schooling. we took away scorekeeping, recess, put them on ritalin, taking away their male role models. cowboys, loggers, g.i. joe. they have been at the emasculated, this last generation. the last place where good role models are found are these the of games and movies. rimbaud, john wayne, those were all good guys. using guns for the right

purposes, to protect children. they are all republicans as well, they were easy targets for the left. we took away the role models for the boys. we stopped keeping score. how are we going to teach the next generation of men to defend america pop -- defend america properly? the military is probably a place where equal opportunity employment, minorities and everything, is at a premium. host: a few other stories on this subject, this is from "the new york times." "a new town after mass shooting." "residents and public officials

host: that is also from "the new york times" this morning. john, democratic line. thank you for getting up early with us. caller: that was a dark day for the nation, the new town shooting. 9 billion animals are killed every year. 10 elephants were killed just for their tusks. i think that there is a moral consequence that. you do not need to eat meat to live.

this massive extermination of the other species plays a part. host: what about your thoughts on the responsibility of those in film and television? caller: they are producing this stuff, but freedom of expression is one of our rights in this country and as a parent's, you have to determine whether or not your children need to rate them and distribute them according to -- i just do not think that it is as important as this disregard for life. we have to have respect for each other. when we kill animals, there is a third great extinction that is

happening. there is a consequence of that. host: a few other headlines that i want to know for you. mark sanford, running for congress. sources close to them confirmed that he will try to win election to the seat formerly held by tim scott.

host: apparently not so much these days, with him planning to run again. also want to point out this story from "the washington post." "u.s. military fighter jets provided back up to a failed french hostage rescue mission, the white house's knowledge sunday in a rare public acknowledgement of american combat operations in the horn of africa."

host: we have a few minutes left on this subject of entertainment and video game violence, their role and responsibility in this ongoing national debate. mike, louisiana, on the independent line, good morning. caller: good morning. i just wanted to say that i play these types of games. i know a lot of people who do. none of us are violent people at all. pretty much all of the people who are doing this stuff, like the guy in newtown, they'll have mental problems, you know? before there were these types of

games or any kind of entertainment, really, there were good people back then. i do not think that these games or videos or anything like that has anything to do with what we're talking about. host: mike this morning, mentioning mental health. here is the story from "the baltimore sun." "begun database lacking in fell -- the gun database lacks info."

host: that story appears in today's "the baltimore sun." john, texas, democratic line. good morning. caller: good morning. they should ban violent games. the kids that may be lonely, they may be in a broken home, they take it upon the kids, they pacify them with games to keep it busy. if a child has mental problems, that may cause them to feel

stronger and violent. host: john, how do you ban violent games? how do you judge what is a violent games -- what is a violent game that needs to be banned? what is ok? caller code games with a lot of killing in them. these kids with mental problems, they get these heroes as heroes. in order to make them feel stronger and more powerful, they want to follow that act. it is a mental problem that will cause them to do that. host: that is john from texas this morning. this note, the chairman of the motion picture association of america, releasing a statement last week amidst the discussion at the white house. he said "what we do not want to get involved with is content regulation."

host: christina, michigan, good morning. caller: how are you? host: good. turn down your tv and go ahead. caller: the guns are coming out of the home. i thought that they were supposed to be locked up. good morning. the way i was brought up is, obey your muslim father.

lockup the guns. host: what can the movie industry and video game industry, what role do you see them playing? do their need to be new restrictions on them? caller: yes, some of these children watch this stuff on television. host: thank you for calling in. that will do it for the first segment of "the washington journal." a new report is out saying that the united states could default on its debt within one month. next we will talk about new mortgage rules announced by the government last week. to do that we want to show you rdray.d cork dr [video clip] >> the core of the ability rests

on two common precepts. lenders have to test the numbers and make sure the numbers checkout. consider where we were a few months ago, where consumers were qualified before loans that were well beyond their means. a bar or perhaps had to show no financial bank statements. none of the critical information needed to evaluate the size of what could be afforded. some of these loans were derided as ninjas loans. the rapid spread of teaser rates made a bad situation worse.

the payments proved too much and cause a dramatic increase in delinquencies. lenders will have to determine the bar wars ability to pay and evaluate their income, assets, savings and debts. this will be made by the principal and interest on the mortgage over the long term. not just introductory. this. -- introductory periods. affordability will be determined based on the interest rate that would prevail in the absence of teaser rates. in these key respects, far worse will no longer be sold mortgages predestined to fail. >> "washington journal" continues. host: welcome back. you just saw the director of the consumer financial

protection bureau talk about mortgage goals. for more on this subject we turn to gretchen morgans and, from "the new york times." tell us about the highlights of these rules and how they will work. guest: these rules are designed to prevent the kinds of poisonous, predatory mortgages to be written. these once lured a lot of unsuspecting borrowers into the loans. they were unable to repay them under any circumstances. they had all of these complex features that were very difficult to understand. i would say, broadly speaking, these rules were designed to prevent another round of the subprime mortgage crisis from happening. host: take us through these rules. what are they, specifically?

caller code some of them are designed so the banks compel loans that are understandable, that have characteristics and are our characteristics of save mortgages. we need to make sure the borrower has the ability to flip -- to repay the mortgage over time. that is the leading characteristic. host: you talk about these rules being put in place to stop these poisonous, predatory mortgages. what were some of the practices that allowed banks to give out these kinds of mortgages? guest: first of all, some of them were written without any consideration for the bar was in come, as we have known and learned over the past five years. many were made with complete

disregard for checking on the income of the bar were. there was no real concern over a loan being repaid. banks were selling them down the line to investors. they were being packaged and put into mortgage securities that were then sold to investors. the underwriters, the banks making the loans did not care whether the loan would perform over time. these rules are designed to stop that kind of practice. some of the loans had characteristics, such as you would not have to pay any principal belem overtime. you could choose to pay only the interest, choose to pay only a fraction of the interest that was due each month. those of some of the loans that appeared to be very affordable, but in reality were extremely costly to the borrowers who did

not understand them. host: for the viewers who might have questions about these new rules, phone lines are open. we are speaking with gretchen morgenson, financial editor of "the new york times." for democrats, 202-585-3880. for republicans, 202-585-3881. for independents, 202-585-3882. also taking your questions on twitter, facebook as well. while i have you, talk about when these new rules go into effect, the timing for people looking to get loans under these new rules? guest: over the next year they are supposed to go into effect. correct me if i am wrong. i think we want them to go into effect pretty soon. they were being hammered out for months and months.

this is really the first big initiative from the consumer financial protection bureau. they do not want a lot of time to elapse between now and when they go into effect. host: that this is progress, this editorial from last week that can now, the rules enacted by the bureau will be subject to other agencies, creating a new category of loans called a qualified mortgage. talk a little bit about what they're trying to do with this new category of loans. guest: this is a mortgage that would be characterized as safe for sound from a regulatory standpoint. there is a qualified residential mortgage, for example, and discussions about that, the

kinds of characteristics that would involve a kind of down payment required in a qualified residential mortgage. would it be 20% down, which was historically, over the years? would it be less? they are hammering out the various aspects of these loans that they would consider qualified. meaning say for sound. the idea is, if the loans that a bank makes do not have those characteristics, the banks would have to keep part of that loan. that would eliminate this idea of turning out loans with no ability to repay them. this idea of having banks required to hold on to a portion of the loan that did not qualify

under these rules is designed to prevent that loading of garbage loans. host: so, they have some skin in the game? guest: correct. caller: talking about where these new rules came from, with these new types of loans being created. [video clip] >> they cannot contain certain features that harm consumers with excessive points and fees, the up-front costs imposed by the bar were. they cannot be risky loans where the principal increases rather than repaying the loan. they cannot be loans in the plot -- that placed a large financial burden on the bar were. monthly deaths of the consumer, such as taxes and insurance, generally cannot add up to more than 43% of their monthly gross

income. no standard is perfect, but the standard here provides a clear line with a measure of protection to borrowers that have increased certainty in the mortgage market. host: i want to bring in a few callers on this subject for you. oklahoma city, oklahoma, democratic line. good morning, vernon. caller: i am tickled to death that the government is setting the rules for the financial industry when it comes to the home market. people worked all their lives to provide a home and held for ways to get it paid off before they retire. this is the one area that the government needs to regulate and regulate closely and i am glad we're finally doing that. now, of course, we have drawn a

line in the sand that we can hopefully reclaim. can we hope that it will ever change back to what we thought we had been through? guest: an excellent question. another one to add to that is -- will the regulators have the appetite to regulate this closely? making sure that banks are abiding by these rules? we had a system going back to their years in a crisis where regulators did not feel that regulation was that important. the federal reserve felt like the monetary policy, setting up interest rates was the key focus that they had. they were not concerned over consumer borrowing and consumer predatory lending. my hope is not only that, as you

point out, these rules remain in effect and will not be watered down by any sort of congressional intervention, but also that the regulators who are charged with enforcing these rules will be very vigilant and make sure that they are enforced. host: the caller brings out that these rules are finally here. can you talk about the history of the rules that were in place on these mortgage loans a few years ago? when these issues were starting to bubble of words -- bubble of bubble up? guest: there were many applications you had to fill out, requirements that the bank had to give you truth in lending disclosures.

it really is still a very complex deal to buy a mortgage. it requires signing hundreds of pages of documents, understanding many intricate close to the financing temple. many borrowers did not understand what they were signing. the people that were underwriting the loans did not have any interest in explaining them to them. these loans where the principal actually grew overtime instead of coming down, i spoke of those loans earlier, where you had a choice to pay only the interest. for these are very complex structures. the only real regulation we had in place was called truth in lending, which told you what you were getting into.

however, these affordable mortgages, they were designed to help lower income, people who had never had a home before get into a home. as you recall, home prices have skyrocketed. affordability was key and crucial. they designed mortgages that were very different from the old, conservative, 30 year fixed-rate mortgage that we all knew and were familiar with. again, some of these loans where you had a very low interest rate to begin with and after several years, it would explode higher. i think the government is aiming to eliminate those. host: this question from twitter -- how much of the responsibility falls on the bar were? how -- to what degree did the

lender commit fraud? guest: this question is on the minds of everyone. there is enough blame for everyone. borrowers were certainly involved in the crisis, overreaching. do you remember the mania for real estate? you could not go to a barbecue without people talking about how much their house had increased in value. naturally, people wanted to get on board that runaway train. if it meant taking on a loan that they did not understand or in some cases taking on a loan in which they lied about their income, many borrowers were willing to do that. but my feeling is that it was the responsibility of the banks, first and foremost, to make sure the loan could be repaid.

on today, aoes piece of paper that every bar were signs that allows the banks to check on their income with the irs. very few went to the trouble of checking on in come with the irs. the banks had an opportunity to check on the income and they didn't. i think the banks were more responsible for the mess. host: david from long island, new york. caller: good morning. i refinanced my house about eight years ago. i borrowed half the value of my house.

the economy went south on us. now the banks are sending us these low interest rates. i go back to refinance the house or remorse reached the house at 6.75%. bank tells me i do not make enough income or income to debt ratio for the house. i do make enough to pay the 6.75%. if the given the lower rate, i would be saving $1,000 a month. what can be done about that? guest: there are many, many borrowers who are having trouble refinancing their home loans. i hear from a lot of them.

it is a real problem. we had a pendulum that had swung out into the wild west or anybody that was breathing got a mortgage. now it has swung the other way. the banks are being ultra cautious and requiring owners disclosures and very conservative income levels. i think there is an element of your story that questions -- does the bank wanted about the 6.75% interest that you're paying on your mortgage. that is a rich interest level in this environment. you have to wonder if the bank

isn't holding on to your loan to maintain that high level of interest. i wonder if the might be worth your while to try to go to another bank and not refinance with the same company. it has become a much more difficult circumstances to get a mortgage because the banks are still recovering from all the bad loans that day made during the real estate mania. host: this idea of the debt to income ratio. that was something richard cordray talked-about. this is from american hero joe. explain this issue for us. guest: this goes to the

heart of the ability to repay the loan. we do not want people taking on loans that they cannot afford to repay. 43% is the outside level. if your mortgage debt sure other debt -- car loans, credit cards -- exceed 43% of your growth or pre-tax income, then that is too much. that is a loan that is becoming too onerous and you might have trouble repaying. anything below 43% is acceptable as a qualified mortgage.

anything above that starts to get into the territory of you are not having enough money left over from all of your financial obligations to live a reasonable life. host: an issue that one of your co-workers wrote about in a column from friday. "clouds seen in regulators' for banks" is the title. host: talk about the balance the consumer financial protection root beer past to work with in insuring banks will still be willing to lend money under these new rules. guest: it is always a balance.

i was describing about the pendulum what we want to eliminate the outside edges of that pendulum when we're swinging too conservatively or to radically. banks are an integral part of the economy. they finance new job growth and new companies and people being able to buy a home, which is typically the largest single investment they will ever make. banks are crucial to this entire process. we need them to be there to help consumers and businesses finance their operations. the balancing act is not being too strict so that they will draw in and not land but not being too lax.

that is a fine line. we shall we shallthe cfpb has achieve that with these rules. financial institutions will complain about any regulation because they did not want to be subject to kinds of rules that instruct them in how to do their business. when you read the complaints from the financial industry, i would say we have to take some of those with a grain of salt. host: gretchen morgenson is the "the new york times" assistant business and financial editor. she was co-author of "reckless endangerment.' guest: who basically were the

interco parties in creating the crisis decades later. host: don is next from clifton, virginia. caller: a good time to segue the early seeds being sewn. things like the community reinvestment act and barack forced banksneys to make it substandard loans. if the regulators had left the banks alone, the government do- gooders, we wouldn't have had all these problems. teargassed is calling for more government involvement and i think that is wrong. host: a chance to respond. guest: when you have a crisis that was this devastating and

harmed this many people, i don't think the answer is to go about allowing these institutions to continue down that same path. i have not suggested are called for greater regulations of financial institutions. i have believe that we need to have regulators who have an appetite to regulate. we did not have that during the 1990's.d h0's and the there was a sense that deregulation was the answer and that government was the problem. this led to a free-for-all and a wild west in lending that created these problems. i agree with your caller in that the government did set out to promote home ownership.

that promotion of home ownership which was instituted with vigor under president clinton in 1995 was a joining of hands between the public and private sector to promote the idea that more people should owned their own home. this idea was say win-win -- was a win-win for everyone. a promotion of an idea regardless of how much sense it made and regardless of the rationale. the government encourage business to really relax their standards. the government relaxed its standards in order to promote this role of greater home ownership.

it was the road to hell paved with good intentions. that is an exact characteristic of what happened. the push for home ownership did create some of these loans that wound up luring some of the most vulnerable people into mortgages that they cannot afford to repay. host: a question for you from twitter, arvind. guest: i think the small community banks came out of the crisis with very few bruises and a few black geyes. the large mortgage originators like countrywide and washington mutual, these were companies that were responsible for the

lion's share of the mess. if you were to go to your small community banker and ask for their business model and take a look at what their losses were, i think you would find they survive this pretty well intact. they were not a force at all for evil in this mess. now they are subject to greater regulation because they are in the industry that helped create the problem. they did not participate on the upside and did not participate in some of the most egregious lending examples, they are being forced to pay the price with greater regulation. host: how big of a market share did the small banks have compared to some of the big boys? guest: very small.

we are talking about your local banker. there are two kinds of sets of banks. there are community banks and the larger banks and the mortgage underwriters that were feeding this frenzy. host: anthony is next from baltimore. caller: good morning. i have an important question. i did it all right with a conventional mortgage, fha. in 2008, the bottom fell out, i got caught and went under water . now i can i get a refinance and the house is worth nothing. is there anything in the new rules for people like me to get

out of this mess that we did not create? what is on the table for us? thank you. guest: these are rules for mortgages to be made going forward. there is nothing in discussion about people in your circumstance, having taken out a mortgage during the mania, paying a price for your home which it is no longer worth and having the loan still out standing and having the house worth less than the loan. many people are in this circumstance. there are discussions about principle forgiveness.

these are nowhere near being decided. there isn't anything for you in the new rules. they are about what to do going forward when you write a mortgage loan. host: there is an announcement that the banks completed an $8.5 billion settlement with regulators. take us through that case. guest: that settlement was around -- it was designed to remedy some of the egregious for closure of practices that had harmed quite a few borrowers. these were the fraudulent filings that were made with bankruptcy courts across the country when borrowers or filing

for bankruptcy. lenders work rubber-stamp think these things without examining them. when you're going through a bankruptcy process, the law requires banks and their representatives follow strict rules. they were not being followed. we had people forging signatures and filing fraudulent filings with the court. it was a disaster. there was an avalanche of foreclosures. the rule of law does not usually get thrown out the window just because there's a tremendous amount of work to be done. it was an egregious series of fraudulent filings. the banks had agreed last week to pay $8.5 billion to borrowers

to remedy those situations. the settlement is so unclear. nobody has told anyone about who is going to get the money. if you had a foreclosure, you're in the group of people who are supposed to have been remedied. it is unclear how they are going to divide the $8.5 billion. did it your home get taken away from you because of these fraudulent filings? if so, what did you get? many, many questions remain. it is too soon to say whether it is going to be effective or have any real impact on people who

were going through foreclosures in those two years. 4.4 million people are in that category of having been in some portion of the foreclosure machined during 2009, 2010. not everyone of them was subjected to some of this behavior. 4.4 million people is the aggregate number of people. you have to find out those who were harmed -- you have to find out how to reach those who were harmed. host: this is your headline back on january 5 on this looming solomon. guest: it is another settlement, very similar to the 50 state supplement that was struck last

year. the government doesn't do the investigation to see how pervasive the problems were and how bad the behaviors were. how can you assign blame and remedies to people if you do not know who was harmed and by how much? "let's get this behind us and throw money at this problem but we don't know the extent of the problem and we do not know how to focus the remedy on the right people." host: karen is next from utah. good morning . caller: thank you so much. i am getting a good education with the housing market. i cannot help but think other people out there that have had a

similar situation. i have a home and got a loan and then the economy goes bad, gas goes up, we cannot make their house payment because all our money is going in the gas tank. then the food market goes up. we are making the house payment. we're at the food bank. my husband gets unemployed. i have refinanced twice so far. $8,000 in settlement costs. then i do would began. the government came up with a program where did not have to pay that. i got a lower payment and we are

going to make it. it's like nobody is talking about the elephant in the living room. all our money is going into the gas tank. guest: cost of living are going up. up. cpi is not going o anybody who goes to the gas station or supermarket sees that the costs are creeping up. that makes it more difficult to make ends meet. i am sympathetic to your situation. it sounds like you now can afford your mortgage.

it goes back to the catch 22 which so many borrowers are in. they are either under water or lost their jobs and did not have the income. they cannot refinance. they are stuck paying a higher mortgage. the fed has brought interest rates to near zero to encourage people to refinance. so many people cannot get a new loan. the zero inches rate policy is of no help to them -- interest rate policy is of no help to them. host: we have a question on

twitter from sea dog. guest: again, it has not been made clear what the terms of the solomon r., what kinds of circumstances will be those that get the remedy -- what the terms of the settlements are. if there were some egregious examples of a bank trying to foreclose when the person was current on their payments, there is a possibility that the borrower could get some money. it seems unlikely if they have walked away from the house that they would be part of the salomon. host: frank from lexington, south carolina, good morning. caller: good morning.

i appreciate your comments. a lot of what you're saying is true. i thought i would bring some additional reality. i have a son who has been in business for himself and he is done very well. he has applied for a mortgage. we have gone through three mortgage brokers who cannot present a package because they do not know what the rules are or they are examined by the underwriting departments of these so-called mortgage brokerage companies. they are so afraid to make a mistake. they cannot utilize something called common sense. as far as the thinking the banks are the bad guys and what has

transpired over the last decade, i think probably president clinton won the sent that letter to relax the standards so more people could realize the american dream of owning their own home and he asked those bankers to relax their standards. the banks had to get creative and create packages so people could qualify for a loan. and then boom, the reselling of all these mortgages came to a screeching halt after about a four purchase turnover rate. government is not the answer. they are admitting they are trying to correct the mistakes of the past by putting pressure on banks 10, 12 years ago as far as the placing pressure on banks

to make loans more qualified. host: let's give gretchen morgenson a chance to respond. guest: i agree with the push for home ownership. it was the national partners in home ownership. it was a plan to push for this. the banks make a tremendous amount of money on these mortgages over the years. they weren't doing it just to respond to government pressure. they were immensely profitable, incredible amounts of money were made making these loans in junk fees and interest rates. until the music stopped, they

were extremely profitable to banks. it wasn't just that day were being charitable. it was a goal for them to increase their earnings. the reselling of the mortgages was so powerfully profitable on wall street. it is the joining of the hands between the government and private sector to push for home ownership that is the starting point for this crisis. host: do you think the banks bear some responsibility? caller: it would be silly to say not. they did have a hand in the transactions. to place all faults on the part of banks under pressure by liberal policy brought forth by government in order to have people "enjoy the american way

of life" i think is a mistake. that government could recreate the situation by having the pendulum swing the other way, we're seeing over qualifications. it is a big problem. one year my son has been paying interest on a construction loan. a mortgage broker cannot present a package properly, particularly under the usda program. it has been an absolute nightmare. host: frank from a south carolina. brian from madison, ohio, good morning. caller: good morning. my wife is an officer.

this problem did not exist during the clinton administration. as soon as bush let everything go. my wife is not allowed to say anything by law. these mortgages were being approved when she knew it was no way that these people could afford these mortgages. it was ridiculous. the balloon payment -- those people that should be involved in being able to see whether somebody is qualified or not. guest: absolutely true.

the fact that your wife was overridden was one factor contributing to the crisis. people tried to restore hands and say this is not right. there were so profitable. there was this push. they were run over by the opposition. i sympathize with her circumstance. host: gretchen morgenson, thank you for joining us. up next, the u.s. could hit the debt ceiling and one out of money. a new report by the bipartisan policy center on this. but first, a news update from c- span radio. joe biden will meet

today with house members to talk about how to reduce gun violence. senators plan to introduce a bill that would limit the size of ammunition magazines. at least one senator says congress is unlikely to pass it. a day long forum is taking place today in baltimore. the conference will take a look at the brady handgun law and improving background checks. michael bloomberg will be addressing the group. it begins at 9:00 p.m. eastern and you can watch it on c-span2. the house returns today and will consider aid to victims of super storm sandy. conservatives are mounting a not

so fast campaign against and nearly $60 billion aid package for the sandy victims lawmakers hope to pushed through the house this week. the complaint is lots of the money will go toward recovery efforts for past disasters and other projects not related to the late november storm. $150 million for fisheries disasters in the northeast and $50 million in subsidies to replant trees damaged by wildfires. that bill expired with the old congress on jan. 3. the house rules committee meets today at 5:00 p.m. to frame the rules for debate. you could hear live on c-span radio or watch it on c-span2.

those are some of the latest headlines on c-span radio. [video clip] >> if you spend time in silicon valley or in detroit or outside the beltway, you feel america has the potential to generate abundance for its own citizens and the world. if you spend time inside the beltway, and looks like lose- lose. will we try to say in the book is one of the lessons of the technology sectors that come from the optimism of the technology sector and how they can give us some ideas here in washington, d.c. >> bill clinton was saying we cannot expect our businesses to compete internationally if they have access to --

>> reed hunt and blair levin of technologyrole tonight on c-span2. >> "washington journal." host: the united states could default half a month earlier than expected if the so-called debt ceiling is not race. we're joined by the senior director, steve bell. explain this term that you use. guest: we called the drop dead date. that is the day all these extraordinary measures expires.

that means the treasury will not have enough money to pay the next bill that comes then in full and on time. host: you try to figure when that date will heit. this is a chart from the debate, when the x date could hit. why is it a range? guest: we do not know what will happen to tax refunds. there could be some delays in getting tax refunds out. people who file their tax returns and expect to get a refund. if those refunds are delayed, at.l be near the end of th

host: take us back to explain how we're juggling these numbers around. we hit the debt limit on december 31st. how was treasury paying the bills? guest: they are using money called extraordinary measures. they borrow money from a retirement fund for people in the thrift savings program. these are federal employees. they take the money from that and use it to pay the bills as they ancome in. they are required to pay that money plus interest. potentialoyees'

retirement fund. host: the government was able to use extraordinary measures to extend its ability to pay its obligations from may 15-august 2. how come we can not buy as much time this time around? guest: there is not as much money available. one thing we wanted to use was taken out, a possible source of money. we have fewer resources and a billion in$200,00 public outflows. federer is the single largest month for cash outflows from the government'

. host: go through a couple of the iou's. guest: one the tax refunds. the irs tries to get your refund to you within three weeks. you can see it online with your refund stands and what it is ready to be done. i think is going to prove very difficult and will be a problem that they will face as a public- relations problem. they do not think the delay will be too long. they think they can get most of it done before the beginning of march. there are three social security payments during the month of february. money is transferred from the

treasury over to the social security fund. those items make february a tough month. host: we are taking your calls in the segment about the debt ceiling with steve bell. give us a call. the numbers are on the screen. is is to inform the discussion -- is this to inform the discussion? guest: we did this last year. there was a question about whether the treasury was telling the truth. people said timothy geithner was wrong when he said may. our wrong was to set the record straight. he was telling the truth.

many of us have been through this before. when he has extraordinary measures, he is telling you the truth. we wanted to set the record straight. people can start making intelligent decisions. some people have said the debt ceiling will not be breached until april. "why are you doing it so early?" as far as we know, this is when we expect the government to be unable to pay its bills on time. not just its interest payments. that is all of its debts. host: what is the treasury department telling you about these numbers?

uest: secretary geithner's testimony has said it will be in that timeframe. will there be a delay in refunds to taxpayers? host: there are some other wild cards. one of the possible choices to raise money is the selling of assets by the government. talk about that as a possible way to raise money. guest: you could do that, a fire sale of a government assets. that seems extremely unlikely and no one has taken that idea seriously. that's like the platinum coin. host: david is waiting from

florida. you're wrong with mr. bell. caller: how are you doing this morning? i don't think the debt ceiling will hit in a month. they'll adjust print more money. there was a sneaky trick back in 1933. taking birth certificates and putting them on the stock exchange. they would have to recall their collateral. the american people are the collateral. they are going to print more money. they are not going to fall by the wayside. they have been doing this for years. they put into place in 1917 and

we have been hit in slavery ever since. we have to figure out how to fix it. they will have to print more money. host: what are some of the consequences if we hit that x date? guest: it is important to take into consideration what the caller just mentioned. we are going to print more money one way or another. the federal reserve could continue its quantitative easing. but we will pass an increase in the debt ceiling. it isn't the future -- it is the next 10 to 12 weeks.

what happens when you do not know when you don't have a final discussion about how much the government is going to spend? people don't know if their paychecks will come on time and in full. this is different than what we have faced in the past. usually there is a problem with appropriations. people get laid off and people come back to work after three or four days and they are compensated for their absence. in the case of not being able to increase the debt ceiling something different happens. they didn't get paid period at some point. let's say you're getting your paycheck twice a month and someone says it will be delayed

four or five days. this is going to cause a great deal of trouble. at some point you will resort to furloughs and firings. just inside the government this will be chaos. the government talking about a possible default between the executive branch and legislative branch is a sign of how dysfunctional we have become as policymakers. raise taxes or cut spending and congress has only raised taxes. if we don't do something about the tax code, we will continue to print money. host: kevin from woodbridge, virginia. caller: i have a bill with a to

balance.$200 if i miss my payments, they will call me. how many follicles do the government debt saying, "when are you going to repay my money -- how many phone calls does the government get saying, "when are you going to repay my money?" we are a bunch of idiots that what our government do whatever they wanted. guest: not enough people are calling their representatives and senators about the debt ceiling and the way we've handled the last 12 months. what you have to do is call your

congressman or senator. someone will answer and be polite to you. you have to insist to get the message through. elections have consequences. the division right now is very extreme. are we being played? politicians will wait until the last second until they do what is the right thing. i expect to happen this time is we will get around that during 26th or 27th and we'll finally get some kind of agreement. it will not change the trajectory of this debt. will vote on a bill that will increase the debt ceiling to

probably $17.5 trillion. there is likely to be little spending cuts and little tax increases. which bans all we've done is put off the day of reckoning. host: is there time for that bill to pass? guest: i am a senior staff -- they know what is going on. members -- we had 102 new members in the house in 2010. we have another 84 in the 2012 elections. that means almost half of the united states house is new to this problem. there has to be a lot of

educating going on before there is a sense of what needs to be done. they will not like what they need to do. will there be a grand bargain and cutting spending or will they not? we have been working on this for three years now. i feel they will punt and disregard we're spending so much on entitlements. host: we are speaking with steve bell from the bipartisan policy center. he worked under pete domenici and staff director for the budget center when pete domenici was chair of that committee. justin from california, good morning.

caller: good morning. i heard that we get enough money into the federal government from taxes every month to pay interest on the debt. we don't have enough money to pay the debt and the other expenses. is it a matter of choosing which one will pay first? that is what i heard on a talk- show. guest: that is an important question. can the present order to the secretary of treasury to pay some bills and not pay others? it is likely that the treasury secretary would pay the interest on our debt.

we would not default on our sovereign debt. a lot of other bills will not be paid. they are just bills you think about. it is thousands and thousands -- two million transactions a day, most of which come from private contractors, people to keep the grounds at the white house in good shape. those are the kind of bills that will not be paid on time and in full. the economics impact of the private sector will be very large and at some point extremely disruptive. host: we have some numbers about the payment scenarios. guest: we have about to enter a $75 billion -- $275 billion

coming in in february. host: this report says what could be paid and what might not be paid. medicare, medicaid, social security benefits. that would cost about $277 billion. but then there be not enough money to pay other things. guest: almost everything else the government does. host: things like defense vendor payments --

host: could be legally make these choices to shut some things down and keep other things running? guest: the treasury believes that have the ability to pay the bills as they come and. in. somebody notices $10 million came in and we go 9.5 million. can we take that $10 million and pay off that $9.5 million? almost impossible to prioritize. do they have the legal ability? probably. no one knows for sure. do they have the desire to pay?

reprogramill time to computer software. to pay the debt, you can do that. but to pay the next installment on the strike force fighter or to pay people who deserve social security benefits, that's a tough choice you have to make. we do not know if they have the power. host: edwin from indiana on the democratic line. caller: good morning. to help the government raise money, i was wondering with all the power balls, lotteries, state lotteries, gambling casinos, boxing, every event that takes in money through

winnings, if the government could set up a united states world lottery, which i would rather help lose my dog to the government then some state-run deal that you do not know where the money is going. i do not know if they could set that up or not. it seems like the government needs to grab control of these lotteries. i love our country. host: another possible extraordinary measure. guest: it might take a while to set up. right now we do not have time. over the longer term, people will think about ideas outside the box like this one. right now the governments in

balance between revenues and what it spends is as bad as it has ever been at least since world war ii. host: talk about the trillion- dollar coin. guest: there is a loophole that was designed for coin collectors which could allow the government to mint a trillion-dollar coin. there is also a technical difficulty. we do not to cash much in the federal government. so you would have a trillion- dollar coin. you would find it difficult to use it. that's probably not going to happen. it should strike us all as strange that we're talking

about lotteries or platinum coins instead of talking about what is causing this debt to rise year after year after year. it is easier to deflect then it is to take a look at what is causing the debt. we have ignored it. the fiscal cliff did nothing to change the debt trajectory. host: there was a statement about this trillion-dollar coin. this is a statement from "the new york times" from the treasury department spokesman. guest: that is a legal opinion.

it is a ludicrous idea to pursue. host: "the washington times" seems to agree. this is a lead editorial in today's "washington times." carl from missouri. caller: good morning. i have a question. i read an article last week. it stated the amount of money the government owes it to other countries and outside debt was $11.5 trillion. $3.5 trillion in debt to social

security, money they owe themselves. the first thing you hear on television is they need to cut social security, raise the age of retirement, and mess with the working people's benefit to save the government money. that is a small portion of the overall debt. the $11.5 trillion. it seems this administration wants to spend our way out of this economic crisis and it is not working and doesn't want to curb spending and like the american citizens are going to suffer the end result of all the spending. what is your opinion about how this debt can be curbed?

is it to cut spending on the government programs that are out there guest: the plan that we put out , the one named after alice rivlin and pete domenici was this. we have three ways that we need to make the debt smaller as a percentage of our gross domestic product. one, we need to have economic growth, no doubt about it. two, we need to have an increase in revenues, but it needs to be associated with a wholesale reform of the tax code, lower rates on individuals, and cover all the loopholes that we spend

about 100 trillion dollars a year on, incentivized programs that we have set up to try to determine people's behavior. the third thing you have to do is you must fundamentally reform the health care programs of the federal government. you don't do it to people now entering retirement. you don't do it to people until they are about 10 years away from retirement, so they can plan. but you must change the way we do medicare. you must make a decision on medicaid, which is such a burden on so many state governments. we are very fundamental promises -- these are very fundamental promises that politicians and made in the past cannot be met. we have made promises that we cannot meet. most people in washington, d.c. are reluctant to admit that, but that's a fact. host: a question from ohio on twitter --

guest: well, i don't know about starving the beast. in the 1980's, that phrase was used when ronald reagan was president, the notion being that if you did not raise taxes enough, then people would automatically cut back on spending. that proved not to be true. so what happens is people will spend and politicians will spend, no matter how much revenue. perhaps the most important thing people don't understand, the average citizen, when you are a member -- when your member of congress shows up and gets sworn in, as what happened last week, already about 2/3 of all the spending that will occur during his or her tenure is out of their control. those are called entitlements. unless you change that law, you will continue to have about 2/3 of federal government spending on autopilot. that number will get worse as

interest costs rise over the next five or 10 years. that fundamental fact that there's very little politicians can do without changing the underlying law, 2/3 of every dollar will already be spent before they take the oath of office. host: a tweet -- guest: of course we have to pay our bills. remember, the debt ceiling is only there to enable us to pay bills we have already run up. we bought the house and now. we have to pay the now we bought the car and now have to pay the note. these are bills already owed to people. this is not new spending. it does not allow new spending. it says the u.s. will make good on the debt that it has. part of that as sovereign debt.

the issuance of treasury bills and bonds and notes. but a lot of it is also payments to people who work for the government, american citizens. are they going to get paid for work they are doing? host: let's go to jay are from maryland on our independent line. -- to j.r. caller: hello. i was wondering if social security and medicare and medicaid will be cut after march 1. will we still get our checks? guest: you will. it will be messy and frightening and will be done in the worst possible way as far as keeping people on the edge of their seats. we will raise the debt ceiling one way or another. what i'm worried about is doing it three months at a time. insuring that the marketplace and american citizens will be kept in a state of uncertainty.

that's the worst thing we can do right now to the american psychologist have this uncertainty. there is one thing that the white house has said they will not do that would bring this to a head. that is, if the president ordered the treasury secretary to pay the bills that were coming in on time and in full even if the treasury did not have enough money under the debt ceiling. what would probably happen in that case would be someone who would be the injured party would bring a lawsuit, they would jump quickly to the supreme court and we would have a massive constitutional confrontation. then you would use the 14th amendment to the constitution in order to pay the debt no matter what? the answer is no one knows. in has never been litigated. the white house has said they don't want to use the 14th amendment. what i'm saying is it may not be within the white house

power to avoid that. host: let me read the section of the 14th amendment that folks are focusing on and possibly using this to allow the president to unilaterally raise the debt limit -- that the 14th amendment, section 4. guest: that the section nobody cared about until recently. it was one of the most important amendments and came during the civil war and after the civil war. it's as we are going to pay the debts we have incurred as a united states government. some people believe you can use the 14th amendment to dispense with a debt ceiling. others argue just as vehemently

and neither side knows the answer. host: will go to diane from new york on the republican line. good morning. caller: good morning. while i was on hold, mr. bell, congratulations, you have been addressing most of my concerns about the financial status of this country and you have reiterated exactly what paul ryan and mitt romney and other republicans have been shouting. keep up the message as much as you can. i hope you have finally gotten through a tube of thick heads. and, yes, this is obama's fualt, not bush. he should be urging congress people to do whatever they can to reduce spending. we are on the verge of exploding. i believe obama is getting a pass on the responsibility.

paul ryan's plan, if it had been pushed through, how would it have affected the financial condition of this country? thank you. guest: thank you. chairman paul ryan, the chairman of the house budget committee, has had budget the last seniors. if they had been implemented fully, what would happen is we would not have a balanced budgets. that's a dream that those of us who wanted 25 years ago, have admitted cannot be done in a short time. what it would have done would be to reduce the increase of our debt and it would have made our debt rise by a smaller margin than the increase in our gross domestic product. that's all we want. we want to stabilize this debt somewhere around 60% of gdp. that's a number that the international monetary fund and others have said is sustainable level.

right now the $16.40 trillion is at 102% of gdp in it we have a tough time ahead of us. the paul ryan bill, had it become law, and done something useful. but you will notice that it did not. the american people had this debate during the political campaign just concluded. that what they wanted was not the paul ryan approach but it was the approach of president obama and other democrats. we had the election. the elections have consequences. that's not a joke. in this case, these consequences are extremely important to the debt future of the country. should. lead more -- should the president lead more? bill clinton did. it is a problem. remember, congress has to vote

for every spending bill. it also has to vote to increase the debt ceiling. the president does not empower through the constitution to do those things unilaterally. host: explain wha the by policy -- what the bipartisan policy center is. guest: >> we are in washington, d.c. and we are bipartisan and not nonpartisan. we have democrats and republicans, former senators, former congressman, but mostly a lot of very senior staff who used to work for the white house and the senate and house. it was started by four former majority leaders of the u.s. senate, tom-0, howard baker, bob dole, and george mitchell. it is devoted to doing very intensive work and analytical work, then making recommendations on problems that are relevant right now legislatively. so we don't think about 45 years and now the relationship between

taiwan and north korea. we don't do that. we have a problem coming up within the next year-and-a-half and here are the kind of political consequences and the debate we think will occur, this is how we can add to the debate and perhaps be useful. it's almost like an outside staff, congressional staff that decides to help people that have to make these decisions. host: don in south windsor, connecticut, on the independent line. good morning. caller: hi. what i would like for him to explain is i give lectures at the university of connecticut to retired people, lot of them professors. i'm astounded at the lack of knowledge of these people have of the economic condition of the united states. these programs are complete jokes. if someone could explain to the american public, when people, with a 1.2 trillion debt reduction over 10 years, but

$120 billion a year. our deficit is 1.2. all they're talking about 10% of the problem. the people don't understand. they think the 1.2 is equal to the deficit. it's only 10% of the deficit. my solution is to raise taxes by $300 billion and cut spending by $900. -- by $900 billion. i find the american public is not very smart. host: you know, that is -- the educational question is a fundamental question. here's what happens. let's talk in practical terms and not a theoretical terms. when paul ryan came out with his budget, he had some substantial changes in medicare and medicaid. over time they would've been phased in. no one over the age of 55 would've been affected by them, giving you time to really

prepare for your retirement. the changes were relatively minor in the short run, but compounded over the next 20 years would've made a real difference in our indebtedness. that is not the kind of debate we had last year either at the presidential or senatorial congressional level. it was this. people want to change medicare want to push ganny. off a people who want to change medicaid are hard hearted and don't care about poor people. we never had a debate on the fundamental question -- can continue spending and continued trying to pretend we can keep these promises? the answer was, we talked about almost everything other than what would you do specifically to cut debt? republicans did not want to talk about increasing taxes whether it was tax reform or not. democrats did not want to talk about medicare and medicaid. i hate to say this, but what really happens sometimes is you

want us to take some pain now to avoid really tough stuff happening to the american people 10 years from now. too many politicians say 10 years from now i may not be here, that is someone else's problem. that really is what is happening, i think, by and large. host: one more call from police from four, colorado, and the democratic line. -- from felicia. caller: good morning. i understand about social security, but that has no government money whatsoever. if this is included within the debt of the government now, is that money that the government has to pay back that they already spent? with jimmy carter spoke of 30 years ago not detected and to put a lock box on its. guest: the social security question does have to be separated from the deficit question to some extent. you'll get a big debate about this, but let's get down to the basics.

we started in 1983 after the greenspan commission, named after alan greenspan. we started saying let's raise enough money from new taxes and change the retirement age but we will stimulate a large amount of money in the federal government in the social security trust fund. that money is now being spent down. it used to be $3 trillion and is now $2.7 and will be committed to people soon to be retiring. i'm very glad you are working, because you pay fica tax as. that means people like me on social security and get medicare can be assured we will continue getting it. what we cannot be assured of is that you will get it. 40 years or 30 years from now you will have a legitimate complaint which is, wait a minute, i paid into social security and medicare 30 years or 40 years and you're telling me i don't have any money that is really for me? , it's not a separate me i would

say, no. and we're now using the taxes for people working to pay the people right now who are entitled to those benefits. so if it is an unsustainable position. medicare is in much worse shape and the trustees of the trust year,say it every medicare is not going to be able to pay in full its obligations by 2016 or 2017. what do you want to do about it? 10 years ago we said that is 10 years from now. now it's 2013 and we are talking about 2017 or 2018. it's time to get serious about this question. host: steve bell is up a bipartisan policy center. the group's new report on the debt limit increase and the approaching x date is available at their web site. thanks so much for joining us.

guest: thank you and we will see what the next eight weeks brings. host: up next, discussing the alcohol, tobacco, firearms, and explosives agency. first, a news update from c-span radio. >> it's 9:16 a.m. eastern. some business news. toyota has replaced general motors as the world's top- selling automaker. the japanese company says it sold 9.7 million cars and trucks worldwide last year. gm says it sold 9.2 9 million. gm did hold the top spot in 2011 when toyota factories or slowed by and quake and tsunami in japan. immigration will be the focus of remarks today by los angeles mayor antonio villaraigosa in prepared remarks. he says immigration reform "cannot wait another political season. washington should be able to walk and chew gum at the same time. the time for half measures and

one-sided approach is is over. the bottom line is the debate is full citizenship. there can be no second-class citizens in america." his appearance at the national press club will air live at 1:00 p.m. eastern time. you can watch it on c-span. one week before president obama's inauguration ceremony, the inaugural committee is launching a smartphone app that will connect people with opportunities to attend service events across the country and provide live streaming video of. -- video ofthe a official events. those are some of the latest headlines on c-span radio. >> students cam video entries with your message to the president are now do. get them into a c-span by this friday for your chance at a grand prize of $5,000. $50,000 in total prize as. go to the website for more.

[video clip] >> the fundamental idea here is if you spend time in silicon valley, spent time in detroit where the automobile industry is being rebuilt, it is spent time outside the beltway, you will see america has the potential to generate an abundance for its own citizens and for the world. if you spend time on the inside the beltway, it looks like a zero sum game, it looks like who's going to lose the most is the gist of negotiations. in the book we tried to say what are the lessons from the technology sector and what are the lessons that comes from the optimism in the technology sector, and how can they give us for ideas we can pass along in washington? >> the other day the former president bill clinton was saying we cannot really expect our businesses to compete internationally if they only have access to speak at one for those of korea.

>> reed hundt and blair levin outline technologies role in repositioning the u.s. as the world's innovation leader. tonight at 8:00 p.m. eastern on c-span2. >> "washington journal" continues. host: each week we take a look at how your tax dollars are at work in different federal agencies. today we are focusing on the bureau of alcohol, tobacco, firearms, and explosives. we are joined by seven perez, a wall street journal justice department reporter. -- evan perez. what is the mission of the atf and its role within the justice department? guest: it has one of the longest names. essentially, it is an agency

started in the 1970's from different federal agencies including one that dealt with the regulation of alcohol, tobacco, and firearms. in the past 10 years most of its stock is to regulate and investigate crimes involving firearms and explosives. so they have about half of their federal agents are focused on doing firearms, on doing -- in cases of crimes involving explosions, the atf is one of the agencies that is supposed to go in. they do very little alcohol regulation or investigation any more. very little tobacco anymore. pretty much it is an agency that focuses on firearms, which is why it is the focus of so much controversy, because their air

as a second amendment concern and debate our regulatory agency and an investigative agency. that draws them into a lot of conflicts. host: some facts on the 80th and its budget. the 2011 budget was $1.1 billion. this agency has seen its name change over the years as its mission has changed. we always knew it as the atf. when did we and the explosives? guest: the explosives came about because the federal government needed a specialized agency to look at whenever there was a bombing or any kind of crime involving firebombs or anything that was either professionally

done or more rudimentary. so the 80th became specialized in focusing on that. e atf became specialized. 9/11?host: as a result of guest: no. it was after such things as the moral building -- morrow building bombing earlier. host: talk about the structure of atf and where it's it's within the justice department? talk about some duplication of efforts with the fbi. about his leadership structure and rarity is. guest: they have had some severe problems in the last few years being able to adapt and atf director confirmed.

in 2006 -- it has always had a tip on its shoulder with respect to the fbi in particular, the dea, and other agencies that get their director confirmed by the senate, so in 2006 they prevailed on congress to change their structure to allow their director to be confirmed. since then, they have not had a director confirmed. the nra and other organizations have blocked any nomination as a result of that. host: we can get into that in this segment of the washington journal, focusing on the atf. calls are open -- phone lines are open for your calls.

george's waiting from ohio on our independent line. good morning. caller: good morning. this is about control. i've understand there's a product called ssar-15 that enables a semi-automatic gun to converted to an automatic operation, like a machine gun. why would atf approve such a device for public? guest: you are getting into some technicalities of the atf's regulatory power. one of the things they constantly face is the issue of the second amendment and there's only so much they can do if congress does not allow them to ban a particular product, there's not much they can do as far as prohibiting it from being

sold. that's one of the problems in recent years with the assault weapons ban, which is now being discussed again. it recently expired. it prevented the sale of certain firearms, semi-automatic firearms. the problem is when you specify what you want to ban, manufacturers change the specifications of their products to fall outside ban. so you have a situation where in recent years you have had changes in products simply so that they can be outside the band. for example, things that are removable make a certain product not subject to certain restrictions. host: let's talk about the regulatory role of atf. here are some statistics on criminal investigations in 2011.

when we talk about 27th thousand cases, what is atf looking to do when you talk about its regulatory role, the inspections? guest: they have the power to go into a fire arms dealers, into the stores, and to take a look. they do periodic inspections of their inventory to make sure firearms are not being sold -- that firearms are not being sold to people who cannot buy them, felons, or guns being registered. you have a lot of its focus is trying to make sure that our arms dealers are keeping proper records, to make sure that firearms are not getting into bands of the wrong people. host: in terms of fire arms dealers, inspections in 2010, here are some statistics on it.

there has been some criticism that there are about 60,000 retail gun dealers around the country and the atf is only doing 13,000 and sometimes it is years in between when the dealer gets inspected to the next time it will get inspected. talk about whether atf has enough manpower. guest: that's one of the complaint you hear from them, but they don't have enough people to go-around to able to inspect. especially in the south and southwest where you have a lot more firearms dealers. the issue is you have more agents -- or you have more inspectors going out and it puts the atf into a deeper conflict with people who say that the

agency is already too overbearing, but they go in and someone has a small piece of paper work out of order, that they come down with a heavy hand. so you have this push and pull, especially in congress, which controls the budget of the atf. i think the budget is about $1.1 billion for 5000 employees. so you have right now a conflict within atf as to whether or not they are big enough to be able to handle these missions. they definitely do not debt amounted to as many inspections as they would like. -- do not get around to as many inspections as they would like. host: brian is on the line. caller: i have a question on the alcohol side of things. when a distiller manufacturers from in puerto rico or bourbon

in kentucky, does the atf collect a tax on that fifth of whiskey at that time or their tax collector at the liquor store? and do you have any numbers for the amount of taxes collected? guest: i do not. there is a small portion of the regulatory power on alcohol but still remains at the treasury department. i believe the money goes to treasury. atf is still very small, very small portion of its work is involved in alcohol regulation our investigation. host: from atf's website--

guest: right. host: mike is on our independent line in houston, texas. caller: good morning. i had the good fortune of carrying a very wise woman, so i am the luckiest man in the world. my wife pointed out that no one with a concealed carry permit has ever committed it's a rampage shooting, so wouldn't more concealed carry permits help this problem? and no women have committed those crimes. host: we are:the atf. caller: these jokers, if they'd just did 10 inspections burma, they could, statistically, 5 times the inspections of these

dealers. host: is that something the atf can do with their current manpower? talk about their budget and manpower. guest: one of the complaints they have is that their budget has been sort of static. you have -- they have not grown very much in recent years. host: debates the the big increases a lot of other agencies sought after 9/11? guest: we have seen some since the 9/11 attacks. since 2008 have gone 4200 employees to just over 5000 agents. so they have gotten an increase. a $500 million budget authority to about $1.10 billion. so they have gotten an increase. they have not grown to the

extent the fbi has grown as far as the budget. but it is an agency that deals for the market is required to do, especially in times like this, after a national tragedy of a big mass shooting, you see a lot of pressure. host: what was their role in newtown? guest: they were there in newtown and they were in or after the mass shooting there. host: what were they there to do, investigation? aurora,in the case of 04 o they sent a robot with a camera to check out the apartment of the alleged shooter to make sure it did not blow up the entire building. so they were key in that one. in the case of newtown, because the shooter had already been killed and there was no concern about any other booby traps or bombs, the role of atf was a

little less. it was more outracing the firearms that were owned by the mother of the alleged shooter. so that was mostly their role, in assisting the connecticut state police with the investigation. host: on twitter -- guest: the fbi -- there's a lot of conflict that happens on these scenes. more than five years ago there were instances where the atf agents and the fbi agents and would rushed to the scene of a crime to be first there so they would have jurisdiction. host: to claim a crime? guest: essentially. it's a long and difficult history between the two. they seem to be working a lot better together in recent years.

the issue with the fbi is their main focus since 9/11 is to protect the country from international terrorism and national tourism or domestic terrorism. host: nick in tennessee on the democratic line. caller: good morning. you're talking about the role of atf. , if the questions is nra was not loading up the house and other congress members with money and donations, with the atf had a better role as far as making rules and regulations towards gun practices and gun ownership and possibly making those things be licensed? i know people want to stand up

for the second amendment, and so do i.. i want that protected as well as the first amendment, for life, liberty, and the pursuit of happiness. but the atf regulated the use of alcohol, because of the violence that alcohol caused in our individuals, like drunk drivers, big changes in laws were made because of drunk drivers killing people and because of the deaths that tobacco caused our citizens, because of smoking, they regulated places where you could not smoke and not around children and stuff like that, to protect them. would be atf make stronger restrictions on people that want to carry guns out in the public and stuff like that? guest: you hit the nail on the head. the issue with atf is the art

-- they are an agency that causes controversy. there's restrictions in the law that governs how the atf does its job that they cannot collect statistics, for instance. one of the things they would love to do is figure out which guns are favored by criminals and perhaps produce some statistics to make sure those guns could be made safer, to figure out how to prevent certain crimes. that is something they're not allowed to do. host: congress wrote legislation saying they cannot do that? guest: they cannot do that. lowed tois not all study gun crimes, scientific standpoint, to see which people perhaps are more prone to suffer gun crime

deaths, which is something a lot of academics would love to do. the fear on the part of the second man and proponents is you could use statistics like that, for instance for insurance purposes, like insurers might be able to deny coverage to a homeowner because they have a gun. so they are thinking two steps ahead. that is why the restriction exists on what the atf and what the federal government can do as far as collecting data. host: there's also restrictions on gun inquiries, on trying to trace a pacific gone back to a specific owner, that the atf does not have a system themselves, they have to go to the company. guest: yes, it's a pretty old system, especially that they are relying on the tracing system. this is why in the inspections processes they are very big on paperwork, because they've , something happens with a gun, they will call up the manufacturers, find upwho they

sold the gun to come and follow the tracks of the gun, trace it from the manufacturer in united states aware effort, or the importer, to a wholesaler, and so on. host: is this something on the table in terms of possible response from the white house that we will seek? guest: it is one of the things they're trying to do that they are talking about. again, these are things that congress is probably going to have difficulty with, given the situation we are faced with. host: we're talking with the wall street journal justice department reporter evan press. next go to richard from lake placid, florida, on our independent line. -- reporter evan perez. caller: thanks for taking my call. when i think of atf, i think of

waco and fast and furious, both of them powerful. the regulation of alcohol and firearms should go to the states. tuna and nail on the head when you said that atf and fbi are fighting for more and more power. that is basically what is going on here. let's get rid of this agency. we still don't know really what happened in fast and furious, where 3000 guns at least were given to mexican drug cartels. a lot of these guns have filtered into the united states and are being used in crimes all over the country. of course, it's one of these drug dealers shows up at your front door with an automatic weapon, it is going to be too late if you are sitting there with a single shot 22. host: talk about how fast and furious and waco and ruby ridge before that have colored how people view the atf.

guest: it is a problem they face. anytime anybody talks about giving them more and more power. that's one of the issues the vice president's's task force will activase. everyone believes it from the nra, from second amendment rights proponents, to pro- control people believe that the 80th need to be fixed. it has not had a director in six years. -- the atf needs to be fixed. the problem is how do you give the agency more responsibility when it keeps having problems like ruby ridge, waco, and fast and furious, which was the current disaster. it is something that shows what their leadership problems have been for the past decade or so. so it's one of those things that they will tactics. host: you bring up the leadership issue art atf,.

they have an acting director who has two jobs and he's a u.s. attorney in minnesota. guest: jones is a u.s. attorney in minnesota. what we can tell from talking with people in congress and those people on the streets dealing with gun issues, he seems to be doing what began to fix the agency. again, he is acting. but he has done a number of changes including improvement in training, professionalism. we have changed over about 20 managers at different levels of atf around the country. he has a deputy named, was also well regarded. perhaps for the first time because there's so much focus on the agency, you are seeing some troop changes happening there. host: a lot of folks looking at this issue of an acting director and calling for

changes, this editorial from newsday -- president obama has nominated somebody for the job and it's not the acting director. guest: that's right. andrew travers is an atf chief in denver who is denominated. that nomination is essentially withdrawn now. now the obama administration is expected to put forward a new chief. it could be todd jones, some people think. the problem is he would have to give up his other job, for which he is senate-confirmed, which is the u.s. attorney in minnesota. keep in mind, what the caller just talked about, there's still

this ongoing discussion which has always been at a simmer as to whether or not we should just get rid of the agency. so many issues. perhaps you give it to thousand or so agents to the fbi or d.e.a. or some other agency and put off the regulatory powers. the nra opposes that idea. host: edward is on the democratic line from kentucky. caller: yes. if the u.s. could initiate a buyback program on these assault weapons, give them to holder, let him sell them to the mexican drug cartels, take the profits and pay down the debt. host: he's talking about issues with a fast and furious. explain what that situation has been for folks not familiar with the investigation. guest: there was an investigation in phoenix at the

atf office which was focused on trying to find big weapons traffickers. a terrible idea they came up with which was to essentially what some fire arms sales to suspected traffickers with the hope they would able to follow it up the chain. instead they just, arms be sold without introducing them. more than 2000 firearms were sold in the end. many of them ended up in mexico in hands of drug cartels. they've shown up at crime scenes. is the name of the border patrol agent who was killed in december 2010. that killing is what brought to light the fast and furious situation. as you know, it's been a huge fight with congress. congress has been investigating it. that has held attorney general eric holder in contempt over documents in the fight.

host: some reaction ton twitter -- guest: i don't know the number. they have had many incidents which have caused controversy going back to uber rich and waco and so on. i cannot give you a number, but it's a repeated problem. one of the reasons they're focusing on re-training a lot of these agents. host: there's still a lot of suspicion. guest: there's a lot of suspicion that atf is not up to par when it comes to doing its. law enforcement its host: from naples, florida, claire is on the republican

line. caller: good morning and thank you for all of these guests that inform the public about what goes on in government. the war on drugs, am i misunderstanding the numbers? i thought it was $40 billion a year. where is the $40 billion when i see the atf budget is only $1.1 billion? guest: the 80th budget is only a tiny portion of what is focused on the war in drugs. -- the atf .. it encompasses everything from what we spend providing aid to foreign police agencies tried to battle drug producers, what the d.e.a. spends to try to do the same job, and the atf and the dea, a lot of the guns investigations end up being in

concert with trying to prevent drug dealers and drug traffickers from getting hold of these firearms. so it is in tandem, the two things. host: a question on twitter -- guest: there are investigations involving drug traffickers and drug dealers. a lot of the gun crimes in big cities. i spent time last summer in philadelphia where there is a city gun crimer- and the atf has been working with the police department to make some of those crimes federal so that they can bring it tougher sentences on the spokes. so all lot of it is involving drugs. atf a lot of does involves drugs as well. host: on twitter --

guest: i think congress is a long way from getting there. i think what the voters of washington state and colorado have done is begun a big discussion between the states and the federal government on this issue. host: we have about 10 minutes left. we are taking your calls. ron is next from connecticut on our independent line. good morning. caller: good morning. it's nice to be able to talk with representatives of the atf. bear with me, because i have the flu. host: just be clear, he's a reporter for the wall street journal. caller: maybe he can clear this up for me. why do they make such a big deal

about the ar-15 being used in connecticut when it was not a factor? it was locked up in the trunk of the kids car. i don't condone and i feel terrible about what he did, because i am a legal gun owner. i have been fingerprinted and did a mug shot and have been background checks. this terrifies me that something like this could go on. why can't atf do something about the bad people? go after the guys with guns that are not registered and are not illegal in this country, never mind as good guys? guest: this state's investigation in connecticut is still ongoing. some of the information that has been released indicates that a semi-automatic was used to kill some of the people in the school, so it was not just

handguns, which is why i think some of the discussion has been going on. that is the biggest problem for the atf. dea has a focus on drug spirit cocaine, marijuana, and so on, dispossessing them as a federal crime. atf's job is a lot more complicated, because guns are not illegal in and of themselves. being able to discern who is the good guy from the bad guy is part of their problem and what their job is so much more complicated than people sort of recognize. host: we talk about the issue of having a permanent director, and tracking issues that have come up since the newtown shootings. any other issues that have come up or changes to laws that might affect how atf does it stop? guest: there's a discussion about changing some of the liability laws. one of the issues has always

been -- i think there have been some people in this country who want to ban guns, which, as far as we can tell, based on supreme court rulings, will never happen. so you have a lot of focus on people who want to perhaps allow victims of gun crimes sue manufacturers. that is something pretty but it right now under our liability laws. so there's some discussion of doing that, tackling that issue. i don't know that it will go anywhere in congress. it is just -- probably does not have enough support to go forward. host: the issue of inspections increasing, with additional funding, has that come up? guest: yes, it comes up every year. even under the bush administration it was a huge source of controversy and for the fbi -- i'm sorry, for atf. it is something that comes up almost every year.

you probably will see perhaps a little bit more money before there, but i don't see much change as far as getting more manpower. host: let's go to sherry on the democratic line from medina. caller: how are you? i have a question in regard to how border patrol intersects with atf. if the border were completely closed and we had a fence and it were patrolled properly, would that make it much easier for atf to not be involved in all these other border activities such as fast and furious? guest: that is probably at the question of the day. the order is what it is. you probably will never see a full fence along the border. you see crossings have gone down, but drugs are still coming across. and so, i don't see that much

will change in that respect. there is an effort to coordinate better between but justice department agencies, which are the dea, fbi ,and atf with homeland security agencies, to the border patrol, ice, and other agencies that do work on the border. i think there has been a lot of focus on trying to make sure those agencies talk to each other better so that they're not doing the same things or potentially causing problems for each other. host: on twitter -- is that how you would classify it right now? guest: that's the easiest thing for people -- this is not partisan. a lot of power that the nra and other organizations have is because they have a lot of support among democrats. so democrats cannot really blame

republicans for this. this is something that is bipartisan. it has been so for a long time. ost: here is the nra's statement on a the person nominated in 2010, i believe, for the atf job, put out a statement after his nomination. they went on to say that he served as an adviser to the international association for chiefs of police gun violence production project, a partnership with the joyce foundation. iacp and the joyce foundation are synonymous with promoting gun control schemes at the federal and state levels. most of the individuals involved in this project were prominent gun-control activists and lobbyists."

do you to think the nra will be able to support the next person obama puts up? guest: probably not. they opposed the bush administration's nominee for the atf, mike sullivan. host: and democrats? guest: yes. so it's not about to is in the white house. the nra has an issue with the leadership of atf. they have a problem with the inspection system and the way in which a investigations are done. in this case, there were focusing on a couple statements he might made in a speech. in their view, crimes of association with groups they don't like. i don't see that changing any time soon. host: thomas is up next on burlington, iowa, on the democratic line. good morning. caller: good morning. i just wanted him to tell the people when fast and furious started, what president started it, and when it started, and

what has been going on since then. i was an nra member. i'm almost 60 years old. since all this has been going , i stopped my membership. i'm a hunter. we don't have guns like they've been showing, and all the clips. i'm a hunter. we don't go out and hunt with 50 or 100 clips or 30 clips. this is ridiculous. people don't need these guns. that's my thought on everything. host: it wanted a little more information on the beginning of the fast and furious. guest: arts and began in 2009. it was an initiative that began under the obama administration. -- fast and furious began in 20 09.

through that we learned about previous instances in which the tactics were used. one of them occurred under the bush administration which was called a wide receiver. the atf had been trying is very bad tactics for some time. host: connie is calling from bowie, maryland, on the democratic line. caller: good morning. i wonder why atf does not get involved until crime is committed. why don't they do something ahead of time? i worked in the government. atf never left to do anything unless there was a crime. they stayed in their office until something went down and then they would go and . respond to and something you said a few minutes obstruction, of gettin people tcleared to

run atf. republicans have not allowed -- they cannot even get somebody for the treasury department because republicans will not vote for anybody to run office. that's why our government is in such a mess. we have to have people in these offices to do their job in order for the government to be run right. guest: the -- a lot the of what atf does is to investigate. you cannot really investigate someone until they have done something wrong. and possessing a gun is not a crime. people are allowed to do that. people are allowed to buy five or 10 guns at a time if they want. people are allowed to buy and sell these things at gun shows. for a law-enforcement agency, it's very difficult thing to